Elden Ring and its Shadow of the Erdtree expansion pack are proving to be a significant driver of growth for Kadokawa's gaming division. This article explores the impact of a recent cyberattack and examines Kadokawa's financial report.
Elden Ring and its DLC Power Kadokawa's Gaming Sector Growth
$13 Million in Losses from Kadokawa's Data Breach
On June 27th, the hacking group Black Suits claimed responsibility for a cyberattack targeting Kadokawa, FromSoftware's parent company. The attack resulted in the theft of substantial data, including business strategies and user information. Kadokawa confirmed on July 3rd that the breach compromised personal data of all Dwango employees, internal documents, and some data from employees of affiliated companies.
According to Gamebiz, this security breach cost Kadokawa approximately 2 billion yen (roughly $13 million), leading to a 10.1% decline in net profit compared to the previous year. Despite this setback, Kadokawa reported strong first-quarter financial results for the fiscal year ending June 30, 2024. This is Kadokawa's first financial report since the major cyberattack on June 8th, which temporarily disrupted various company services.
Kadokawa has fully restored its business operations. The publishing and IP creation sectors anticipate a gradual recovery in shipping volumes for affected publications throughout August, with a return to normal daily shipments expected by mid-August. Several affected major web services are also resuming normal operations.
The company's video game sector demonstrated remarkable growth, achieving sales of 7,764 million yen—an impressive 80.2% surge compared to the previous year—and a 108.1% increase in ordinary profit. This outstanding performance is largely attributed to the exceptional success of Elden Ring and its Shadow of the Erdtree DLC, significantly boosting the gaming division's revenue.
